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Janez Potočnik

European Commissioner for Environment

Sustainability as a means to Europe's Future Competitiveness

International Conference on "Green Markets - World of Sustainable Products"

Berlin, 29 September 2011

Ladies and Gentlemen,

Voltaire said that "the present is pregnant with the future". This is an interesting metaphor, but it is also quite true literally.

200,000 extra people are sharing our planet every day. With our planet's population expected to rise to more than 9 billion by the middle of this century, the stress on tomorrow's resources will certainly increase.

Add to that the prediction that 2 billion middle income earners in 'developing countries' are expected to triple their consumption by 2020 and it is clear that we have to start to get ready.

So what does Europe have to do to prepare for this future? Of course Voltaire's statement was not meant literally; his point was that we can already see - from our circumstances today and from the way we behave - what awaits us in the future.

If we look at Europe now we can see that we have economies that are built on decades of resource-intensive growth. We have the world's highest net imports of resources per person. We use 16 tonnes of materials per person per year. We throw away 6 tonnes per person, and half of that waste is then just buried in the ground as landfill.

If we continue like this, by 2050 demand for food, feed and fibre is forecast to increase by 70 %. And yet 60 % of the ecosystems underpinning these resources are currently degraded.

If we are to continue to meet our needs and enjoy our living standards within the constraints of our planet we need radical transformation! Our entire economic system is a remnant of a previous age – an age of abundance. But what worked well in the 19th and 20th centuries could spell disaster for the 21st.

We will need to change the energy we use to power our economy, the agriculture we use to feed ourselves, the transport systems that move us from A to B, and the industries that build the products we rely upon.

This is why the European Commission is calling for a large-scale switch to a resource-efficient economy. One that saves resources wherever possible, one that seeks to dematerialise our consumption patterns, one that values resources in a realistic manner, and one where recycling and reuse are second nature. This is why we adopted a Roadmap to a Resource Efficient Europe two weeks ago.

The timing of our roadmap might seem a little unfortunate. In Brussels and Berlin leaders are rightly focussed on public finances and currency stability. But even if resource efficiency is not on the front pages, it is still very much at the heart of the European strategy for structural economic reform: Europe 2020. It is essential for our longer term competitiveness and growth.

The Roadmap has at its core, a vision of sustainability. Our vision of what Europe should look like in 2050. Allow me to share this vision with you: … By 2050 the EU has grown in a way that respects resource constraints and the capacity of our planet. Our economy remains competitive and inclusive, and provides a high standard of living at a far lower environmental cost. Resources are sustainably managed, climate change milestones have been reached, and biodiversity and the ecosystem services have been protected and substantially restored.

The vision can be made reality through tangible initiatives and the roadmap sets these out and defines milestones to be reached in between 2012 and 2020. These are particularly focused on three areas of our lives: where we live, what we eat and how we move around: three areas that together account for up to 80 % of the impact of our resource use.

The Roadmap builds on many existing instruments, from waste legislation to green public procurement, and from research programmes to eco-design. But for the first time it puts these in a coherent and predictable framework. And for the first time it integrates them into the wider story of our structural economic programme.

The Roadmap also calls for the mobilisation of new policy instruments, such as market-based instruments. In particular, our strategy seeks to correct market failures, and to get the prices right so that they reflect the true cost and impact of resources and point consumers and producers in the right direction.

If we can get the prices right we will ensure a more rational allocation of resources, but we will also direct more effectively the innovative capacity of our businesses, which is so essential to achieving any economy transformation.

Whilst resources were cheap and labour was expensive that effort and ingenuity was put to good use – and particularly in Germany – in raising labour productivity levels. Today, as German manufacturing companies face material input costs that are twice that of human resources we need to trigger the same attention to raising resource productivity.

Our challenge is to use less of what we have to achieve the same, or even more. To reduce the environmental impact of consumption and production throughout the life cycle of products and services, while maintaining the standard of living of EU citizens and improving the competitiveness of EU business. What we call "decoupling".

This challenge will involve not only technological innovation, but changing our behaviour, both as consumers and as producers. Getting the prices right might do some of the work, but we also need to make sure consumers are aware of their power and responsibility, and are able to make informed choices.

The big societal challenge is to reconcile smarter consumption attitudes with our consumption-dependent economy. Technical efficiency gains often lead to increased consumption, which erodes the benefits of that efficiency. We urgently need to develop means to overcome this "rebound effect". That is why we need instruments on both the supply and sides.

On the supply side, by producing "more with less" products are becoming more resource efficient. For instance, by setting benchmarks of environmental performance, the Ecodesign directive has made a range of products more efficient in the use phase as well, reducing emission and saving money to EU citizens. The first 9 Ecodesign measures adopted will allow by 2020, yearly savings equivalent to nearly 13 % of present EU electricity consumption. This means that this instrument alone is taking the EU closer to its 2020 energy efficiency target.

Just imagine that we get these kinds of results not only for energy efficiency, but for wider resource efficiency.

And on the demand side, another opportunity to make our product policies work better is to align the European Ecolabel, Energy Label and Green Public Procurement criteria, thus creating a larger, more accessible and simplified market for sustainable products. The 15 % of EU GDP that is spent by public authorities should be used to give a boost to innovative resource efficient products and services.

As in any economic transformation there will be winners and losers. For those who are ahead of the curve it will be an immense opportunity. The winners will be those that are developing and using the new materials, recycled materials and non-toxic renewable materials. The winners will be those that are adopting new and innovative business models such as leasing.

As for the losers,… well my belief is that if we prepare for resource constraints of the future in a predictable and controlled way now, the pain will be a lot less than if we close our eyes until we hit real shortages and price hikes.

German industry will have many winners. Germany is leading the way in many green technologies and services. This has been encouraged by challenging targets on renewable energy, development of markets for green products, and forward thinking policies.

And looking outside Germany and Europe, what about winners and losers in the global economy? As we prepare for the next Earth Summit in Rio in June 2012, can we convince developing and less developed countries that they have a common interest in taking care of our planet's resources?

The economic growth of this century will be most marked in emerging economies, where it has the potential to lift billions out of poverty. But one thing is sure – that will never happen if the developing world simply follows the development pattern of today's rich countries. As I already mentioned, the approach that worked in the 19th century will fail in the 21st, accelerating the degradation of our already fragile environment, and worsening climate change.

The answer is not to slow growth, but to work towards the right kind of growth, to economies that secure growth and development, improve human well-being, tackle poverty and preserve the natural capital upon which we all depend. It means building on the sustainable management of the natural capital in the developing world, making use of low-carbon and resource efficient solutions and stepping up efforts to promote sustainable patterns of production consumption.

The Rio+20 conference could mark the start of global transition to a green economy. It offers the opportunity for the EU to advance our commitments to sustainable development while being fully in line with the EU 2020 objectives of smart, inclusive and sustainable growth in the global context.

It is the way to avoid that in the not so distant future we would all be losers; that our present would deliver a healthy and sustainable future.

Thank you for your attention.

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